{"id":339867,"date":"2025-06-09T19:42:02","date_gmt":"2025-06-09T14:12:02","guid":{"rendered":"https:\/\/forumias.com\/blog\/?p=339867"},"modified":"2025-06-15T18:34:32","modified_gmt":"2025-06-15T13:04:32","slug":"indias-apparel-export-ambition-needs-scaled-up-reforms","status":"publish","type":"post","link":"https:\/\/forumias.com\/blog\/indias-apparel-export-ambition-needs-scaled-up-reforms\/","title":{"rendered":"India\u2019s Apparel Export Ambition Needs Scaled-Up Reforms"},"content":{"rendered":"

Source<\/strong>: The post India\u2019s Apparel Export Ambition Needs Scaled-Up Reforms has been created, based on the article \u201cHow to tailor the garment sector for exports<\/strong>\u201d published in \u201cIndian Express<\/strong>\u201d on 9 June 2025. India\u2019s Apparel Export Ambition Needs Scaled-Up Reforms.<\/strong><\/p>\n

\"India\u2019s<\/p>\n

UPSC Syllabus Topic:<\/strong> GS Paper3- Economy- growth, development and employment.<\/p>\n

Context<\/strong>: India\u2019s textile and apparel sector employs 45 million people and contributes 2.3% to GDP. However, its share in global trade is just 4.2%<\/em>. Apparel exports alone account for only 3% \u2014 $15.7 billion out of $529.3 billion<\/em> \u2014 a figure that has stagnated for two decades<\/em>. This low growth demands urgent reforms.<\/p>\n

For detailed information on Textile Sector in India<\/strong> read this article here <\/a><\/p>\n

Stagnation in Apparel Exports<\/strong><\/h2>\n
    \n
  1. Low Share and Declining Growth:<\/strong> Despite its workforce and legacy, India\u2019s global apparel trade share remains modest<\/em>. Apparel exports have declined at an annual average growth rate (AAGR) of \u20132%<\/em> in recent years.<\/li>\n
  2. Unrealised Potential:<\/strong> If the earlier AAGR of 8.5% (2004\u20132017) had continued, exports could have reached $31 billion by 2030<\/em>. Under the 2004\u20132023 average, they may only reach $21 billion<\/em>, falling far short of the $40 billion target<\/em>.<\/li>\n
  3. Need for Strategic Rethink: <\/strong>This data shows that without bold reforms<\/em>, the 2030 goal is unrealistic. India needs policy and structural transformation<\/em>to revive momentum.<\/li>\n<\/ol>\n

    Scale as the Central Bottleneck<\/strong><\/h2>\n
      \n
    1. Highly Fragmented Sector: <\/strong>Over 80% of India<\/em>\u2019<\/em>s apparel units are MSMEs<\/em>. They are small, dispersed, and uncoordinated<\/em>, limiting their ability to fulfil large global orders or gain economies of scale.<\/li>\n
    2. Global Benchmarking:<\/strong> China, Vietnam, and Bangladesh<\/em> have created large, integrated, export-focused factories<\/em>. These setups attract global buyers, lower costs, and reduce lead times.<\/li>\n
    3. Scope for Mass Employment:<\/strong> The apparel sector can generate mass formal jobs<\/em> quickly. A worker can be trained in 60 days<\/em> to operate a sewing machine, offering a path to employment for India\u2019s youth.<\/li>\n<\/ol>\n

      Lessons from Shahi Exports<\/strong><\/h2>\n
        \n
      1. Remarkable Growth Story:<\/strong> Shahi Exports, started in 1974 with 15 women<\/em>, now has 50+ factories<\/em> across 8 states, employing over 1,00,000 workers<\/em>(70% women) and earning over $1 billion annually<\/em>.<\/li>\n
      2. Pillars of Success:<\/strong> Its growth was powered by professional operations, in-house fabric production (80%), women\u2019s employment, and environmental sustainability.<\/li>\n
      3. Inspiration for Replication: <\/strong>Shahi proves Indian firms can scale<\/em>, but this took 50 years<\/em>. To replicate this success faster, bold and enabling policies<\/em> are essential.<\/li>\n<\/ol>\n

        Policy Reforms to Enable Scale<\/strong><\/h2>\n
          \n
        1. Access to Affordable Capital: <\/strong>India\u2019s capital cost (9%)<\/em> is much higher than China (3\u20133.5%)<\/em> and Vietnam (4.5%)<\/em>. A 25\u2013<\/em>30% capital subsidy<\/em> for units with 1,000+ machines<\/em> and 5\u20137-year tax holidays<\/em> can encourage investment.<\/li>\n
        2. Labour Law Flexibility:<\/strong> India\u2019s 52 central labour laws<\/em> create rigidities. Overtime wages are double the hourly rate<\/em> vs. ILO’s 1.25 times<\/em>, raising costs. Linking 25\u201330% of MGNREGA funds<\/em> to subsidise garment labour can improve competitiveness.<\/li>\n
        3. Focus on Skilling: <\/strong>Schemes like SAMARTH should be scaled up for short-cycle, demand-driven skilling, especially for women. India needs job creation, not just income support.<\/li>\n<\/ol>\n

          Infrastructure and Incentive Redesign<\/strong><\/h2>\n
            \n
          1. Strategic Garment Hubs<\/strong>: <\/strong>At least two PM MITRA parks should be garment-focused in states like UP and MP to lower migration costs, reduce expenses, and promote inclusive growth.<\/li>\n
          2. Export-Linked Over Production-Linked Incentives: <\/strong>India must adopt an Export-Linked Incentive (ELI)<\/em> model that rewards global competitiveness<\/em>, not just higher production volumes.<\/li>\n<\/ol>\n

            Conclusion: <\/strong><\/h2>\n

            The garment sector is crucial for both exports and employment. Scaling it up will uplift the entire textile value chain. But time is limited. Creating 10 Shahi-type enterprises in 10 years needs swift and visionary policy execution.<\/p>\n

            Question for practice:<\/strong><\/p>\n

            Discuss how India can scale up its apparel sector to increase global export share and generate mass employment.<\/p>\n","protected":false},"excerpt":{"rendered":"

            Source: The post India\u2019s Apparel Export Ambition Needs Scaled-Up Reforms has been created, based on the article \u201cHow to tailor the garment sector for exports\u201d published in \u201cIndian Express\u201d on 9 June 2025. India\u2019s Apparel Export Ambition Needs Scaled-Up Reforms. UPSC Syllabus Topic: GS Paper3- Economy- growth, development and employment. Context: India\u2019s textile and apparel… Continue reading India\u2019s Apparel Export Ambition Needs Scaled-Up Reforms<\/span><\/a><\/p>\n","protected":false},"author":10320,"featured_media":340430,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"jetpack_post_was_ever_published":false,"footnotes":""},"categories":[1230],"tags":[216,8184,10500],"class_list":["post-339867","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-9-pm-daily-articles","tag-gs-paper-3","tag-indian-economy","tag-indian-express","entry"],"jetpack_featured_media_url":"https:\/\/i0.wp.com\/forumias.com\/blog\/wp-content\/uploads\/2025\/06\/Indias-Apparel-Export-Ambition-Needs-Scaled-Up-Reforms.png?fit=1280%2C850&ssl=1","views":"","jetpack_sharing_enabled":true,"_links":{"self":[{"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/posts\/339867","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/users\/10320"}],"replies":[{"embeddable":true,"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/comments?post=339867"}],"version-history":[{"count":0,"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/posts\/339867\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/media\/340430"}],"wp:attachment":[{"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/media?parent=339867"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/categories?post=339867"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/forumias.com\/blog\/wp-json\/wp\/v2\/tags?post=339867"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}